Two Long-Running Potomac Restaurants Fold

Many small businesses cannot afford the high rent.

When the Potomac Village Deli and then Picasso Grille closed recently, Potomac two 25-plus-year institutions within a week of each other. The Potomac Village Deli’s signature food is still available through a catering service, but the storefront restaurant no longer exists.

Over the first four years of the deli, “business was good, but rents escalated considerably,” said Adam Greenberg, an owner of the Deli and Potomac Pizza. “The catering side grew and started to carry the restaurant side.

“The Deli had been unbelievably popular,” he added. “As a resident of Potomac, it’s sad to lose the Deli. It was where you could take your kids on the weekends.”

In an area where commercial rents run for $22,000 per month, Greenberg says that it takes “high-ticket items,” in addition to a steady stream of customers, to keep a restaurant afloat.

“A low-ticket item restaurant can never survive in Potomac,” said Greenberg. “People say they want a bagel place, but a bagel place can never afford to be there.

“Is it possible over the years that Potomac will lose more restaurants than it gains? Absolutely.”

Greenberg thinks his Potomac Pizza will stay afloat because the food items cost the restaurant less, and they do substantial delivery business. The store also has three sister locations in Chevy Chase, Rockville and Gaithersburg.

ANDY ROSS, a Potomac resident who heads the Potomac Chamber of Commerce, agrees that astronomical rental costs are discouraging small business owners. High commercial rents in Potomac forced him to open shop elsewhere.

“Potomac is a high-rent district, and that doesn't necessarily bode well for businesses to come to the area,” he said. “I’m a business owner myself, and I looked at renting space in Potomac. It was too expensive for me.”

The Potomac Chamber president opted for the Kentlands in Gaithersburg instead.

“We do a lot of business in Potomac,” said Ross of Andy’s Parties, his event-planning company. “I would have loved to set up shop here, but rent in Potomac is about triple what it is in the Kentlands.”

Rent in Potomac is about $70 per square foot, compared to about $24 per square foot in the Kentlands, according to Ross.

“The bigger businesses that pull upon regional or national resources can withstand the rent better than local businesses,” he said. “That’s why you’re seeing a lot of banks doing well in Potomac. That’s why you see a lot of higher-end restaurants with higher ticket prices per meal doing well.

“But the typical business has a hard time being successful paying $70 per square foot.”

THE OWNERS of three other long-standing restaurants in Potomac acknowledge the challenges of high rental costs but stress hard work as their secret ingredient to success.

It doesn’t hurt that a dinner for two costs about $60 or more at Normandie Farm, Hunter’s Inn and Renato. The two former restaurants have had to adjust their menu prices because of increases in rent and utilities.

Normandie Farm, a French-style restaurant on Falls Road, has operated in Potomac for 75 years. Cary Prokos began working as a chef there in 1983 and became owner 11 years later.

“I have rent, but I believe that rent is what it is, and if you want to have cheap rent then get more business,” he said. “You go in with your eyes open. I don’t like the new electric bills and gas bills, but they are what they are and I have to find a way to increase my sales.”

Prokos has drummed up business with new outdoor dining options and low-frill kiddie meals to keep customer’s children satisfied while their parents enjoy a white tablecloth dinner. He’s also planning a 12,000 square foot addition to serve as a banquet hall for up to 350 people.

The Hunter’s Inn, located on River Road, has been in Potomac for 26 years.

“I’m sure [high rent] is why both of them left,” said Hunters owner Fred Berman about Potomac Village Deli and Picasso Grille. “The rents are extremely high. You really have to do a lot of business in order to survive.”

Berman attributed most of his restaurant’s success to experience.

“I’ve been doing this for a long time – I’ve been in the restaurant business for 50 years,” he said. “If you stay abreast of the market and you’re good to your customers and treat them well, you’ll do good business and have good food.”

Enzo Iachetti has been a manager at Renato Italian Restaurant on River Road for the last 15 years of its 16-year history.

“Everybody pays a higher rent here because this is a prime place to rent,” he said of Potomac. “We try to get more people into the restaurant, and we have promotions going on. We’re not complaining – we have a good community here that supports us.”

Iachetti says that the secret to Renato’s success is simple.

“Keep the customer happy. When the customer’s happy, they come back to you,” he said. “People know us very well in the community, and we give back to the community. People ask for donations for school or church and we always say yes.”

WHAT’S THE SOLUTION for “low-ticket” restaurants and businesses trying to survive in Potomac?

Greenberg doesn’t think there is one, and Ross is doubtful as well.

“I think the community just has to get out and put pressure on landlords to provide those kind of options, but as a business owner the landlord wants to make money too, so it’s a tough call,” said Ross. “I don’t know if there is a good solution. At the Potomac Chamber, we're doing everything we can to promote the businesses here, but it’s tough to get past $70 per square foot.”

“I don’t think it’s a matter of restaurants not being busy enough,” he added. “I went to the Deli all the time. It was always incredibly busy, but rent got too high to justify being there.”

One mom-and-pop diner that defies the odds is Tally Ho, a pizza shop located on Falls Road. The restaurant, which is run by husband and wife Pete and Youlla Vellios, has operated in Potomac for 38 years. The couple, who are training their son for the family business, say they have put in very long hours to make the restaurant a success.

“We started when I was 16 and he was 17,” said Youlla Vellios. “When we got [Tally Ho], it was just a counter with a couple seats. We made it into a restaurant.”

Tally Ho now serves a full menu that includes pizza, Italian and Greek food. It is open for breakfast, lunch and dinner seven days a week.

“[The rent] is high compared to other places, but we manage,” she said. “You have to work hard for it. We’re always here.”

The owners focus on selling more food rather than raising prices.

“We try to keep our prices low as much as we can so we can sell more stuff and make money that way,” she said.

A pizza at Tally Ho costs $9.99, and Youlla Vellios said that a couple can eat dinner there for $20.